It’s been a rough journey for the cryptocurrency market in 2022. By November the market had dropped by 70% from its previous peak in November 2021. When things were looking down after the FTX crash turned them more dire. The question is, can the cryptocurrency market rebound in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has had its fair share of drops in the past. Each time, it has bounced back by a massive increase.
In 2013, for instance, Bitcoin reached a peak of $1,160. Then it fell for more than a year, reaching a low of $150. But, in 2017, it broke the record and hit a record record high of $19,600. Then, in 2018, it was trading at $3,100. In the year 2020 it struck through that resistance and hit a new high of $68,000 in November 2021. And just like that, we’ve witnessed another drop. However, the past has proven that following each dip the bull runs.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed before, fall-offs are usually followed by a long bull run that finally overcomes the resistance set by the previous high price. This is evident not only in Bitcoin but also in other cryptocurrency.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and better companies and industries taking to it, its usage and acceptance is rising. From banking to gaming cryptocurrency is being utilized in a variety of ways. This growing demand could result in more people getting involved in the crypto market, which in turn could increase the price.
A rise in the interest of institutions for crypto
In recent years, we’ve seen a growing curiosity from institutions investing in crypto. From banks to hedge funds and even large corporations are beginning to investigate the possibilities in crypto currencies. This increased interest from institutions could provide more stability to the crypto market and lead to higher prices.
Regulations from the Government
As the crypto market grows and mature, governments across the globe are beginning to establish more favorable regulations for crypto. This will help draw more investors and increase the acceptance of crypto in general.
More use cases for blockchain
The technology that is the basis of many cryptocurrencies, blockchain, has a wide range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many and more industries are starting to explore how they can make use of blockchain technology, which could stimulate more investment and excitement in crypto.
Advancements in technology
Crypto and blockchain technology are still in the beginning stages of development. As advancements continue to be made in areas like scalability and security, the potential of crypto assets will expand. This could result in more acceptance and higher prices.
Global economic uncertainty is growing
In the current instability in the economy caused through the COVID-19 pandemic, as well as other causes many investors are starting to look for safe haven investments like bitcoin and even gold. Since the economic outlook for the world is uncertain and uncertain, this could lead to an increase in demand for crypto and increased prices.
Interest from retail investors
Institutional investors aren’t the only people who are interested in cryptocurrency. Retail investors, or even individual investors are also beginning to get involved in the crypto market. With increasing numbers of everyday people are educated about crypto and the best ways to invest in it, this could lead to an increase in demand and consequently higher prices.
The growing awareness and acceptance of cryptocurrency
As the crypto market continues to mature, more and more people are beginning to learn about and understand the concept. As understanding and acceptance of crypto grows, this could lead to more people buying and holding crypto, which can drive up prices.
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Financial decentralization (DeFi) is an emerging area of the crypto market that enables financial services to be created using blockchain technology. As DeFi expands and more platforms and projects become available, this will lead to a rise in adoption and more expensive prices for crypto.
Advances in crypto-based payment methods
As the crypto market grows, more and more companies are starting using crypto to be a means of payment. This could result in increased use of crypto in regular transactions, and a rise in prices.
The increased investment of sovereign wealth funds
Sovereign wealth funds, which are government-owned investment vehicles, are beginning to explore cryptocurrency as a possible asset class. As more of these funds dedicate a part of their portfolio to crypto, it could increase demand and higher prices.
Use of crypto for payment across borders
One of the main advantages of cryptocurrency is its ability to make swift and affordable cross-border transactions. As more individuals and businesses start to utilize cryptocurrency for international transactions this could lead to increased demand and higher prices.
An increasing number of crypto ATM’s
The number of ATMs for crypto continue to increase it will be easier for individuals to purchase and hold crypto, which will boost demand and increase prices.
Development of security tokens
Security tokens, which are digital assets that are used to represent ownership in an asset like stocks or real estate, are a rapidly growing segment of the cryptocurrency market. With the increasing number of security tokens being created and traded, it can lead to a higher demand, and thus higher prices for crypto.
More adoption by merchants
With the increasing number of businesses start accepting cryptocurrency as a method of payment, it will make it easier for customers to hold and use crypto, which could boost demand and increase prices.
So, will crypto rise in 2023? Only time will tell. With these things being considered, it’s possible that the cryptocurrency market will have a rebound by 2023. And for those who are in it for the long haul patience and discipline is essential.